1. when reading music how do you know what string to play on and where to go on the fretboard ?

There are numerous places to play any given note (with a few exceptions). In deciding where to play a particular note, look at the range of notes you are playing and take the most economical and efficient route. In other words, you do not want to be doing a lot of jumping around. If you range is from the lowest B (on a 4 string) to a D# on the G string, you would want to play the piece in6th or 7th position as opposed to starting out in 1st or 2nd and then having to jump up to get the D#

2. I have this book called Mel Bay's Complete Book Of Bass Essentials , in this it shows :

For 5-string Basses Only
C Major Positions

#1 THE TONIC BEING ON THE A STRING

-1st Position : C Ionian and B Locrian going down to G Mixolydian and D Dorian.
-2nd Position : D Dorian going down to A Aeolian, E Phrygian and F Lydian.
-3rd Position : E Phrygian and F Lydian going down to B Locrian, C Ionian and G Mixolydian.
-4th Position : G Mixolydian going down to D Dorian and A Aeolian.
-5th Postion : A Aeolian going down to E Phrygian, F Lydian, B Locrian and C Ionian.

What exactly does that all mean ?

The ionian mode is another name for the Major Scale. If we build a scale or mode off of each note of the major scale those are called the modes. For example, if we build a mode from D to D using the notes of the major scale it is called the Dorian Mode. The Dorian mode is based on the 2nd degree of the major scale. The Phrygian is based on the 3rd, the Lydian on th 4th, Mixolydian on the 5th, Aeolian or natural Minor on the 6th and Locrian on the 7th.

Often times as we learn to play we play a major scle without extending the scale above or below the tonic. As we expand the notes above or below the tonic we start to touch on the other modes.